A detailed review of the global Dairy Report 2020 milk market has been published by IFCN experts. The analysis of the dairy sector covered more than 200 countries. Experts compared the profitability and productivity of dairy farms, milk prices and feed in different countries.
Ukraine in the IFCN report.
The IFCN study presents a detailed analysis of 123 countries - the largest milk producers (98% of world production) in 2019. Among their list, Ukraine again ranked 22nd, as it did last year, despite a significant reduction in the number of cows and milk production. However, by the end of 2020, due to the aggravation of the crisis in the dairy industry and the lack of adequate state support, Ukraine is likely to lose several steps in the ranking. Analytical data and research of the dairy sector of Ukraine were prepared by the analyst of the Association of Milk Producers Volodymyr Andriіets.
In particular, the report states that in 2019, Ukraine produced 9.0 million tons of milk based on dry matter (SCM), the price of raw milk was 11% lower than the world market price, and the country's self-sufficiency in milk was 104%. In 2014-2019, milk production decreased by 2.3% per year, the number of dairy farms decreased by 4.3% annually, while the average milk yield increased by 2% annually.
A year before the crisis.
IFCN experts state that in 2019 the growth of milk production in the world was 1.4%, which is significantly lower than the long-term average (2.3%). The growth was mainly due to India, Oceania, Africa and the Middle East. At the same time, the growing popularity of milk alternatives in rich countries and the low availability of milk in developing countries have slowed the growth of demand for dairy products. The economy of dairy farms turned out to be more positive, as the world price of milk increased by 9% to the level of 37.3 dollars/100 kg in 2019.
"At the same time, for many farmers, especially in the United States and the European Union, the price of milk has often been 'too low to survive and too high to die,'" - said IFCN Director Thorsten Hеmme.
Crisis and prospects for milk prices by the end of 2020.
The global situation in the milk market remains uncertain. The indicator of the crisis for the dairy sector was primarily the fall in the cost of raw milk. The "epicenters" of the wave of declining world prices were the United States and India, with rates of -29% and -19% from February to May, respectively.
However, according to experts, a gradual U-shaped recovery is expected: previous price levels will be regenerated, but this will take a significant period of time.
The future of the markets will be determined by the import demand and conditions of world milk production from major exporters, which in January-September amounted to + 1.3%, which puts additional pressure on world prices in a pandemic.